Bid on int’l event requires approvalThe ruling Saenuri Party yesterday proposed a bill that would require local governments to receive approval from the National Assembly when they want to place a bid on an international event that costs more than 10 billion won ($9.4 million).
The proposal comes after a number of regional governments wasted taxpayer money to host costly global sporting events in recent years that have failed to generate profits. Critics claimed that certain provincial governors and city mayors made bids for these events ahead of the local elections for political gain.
If the bill, drafted by Representative Kim Jae-won of the Saenuri Party, passes through the Assembly, local governments must obtain lawmakers’ approval before they bid for global events costing 10 billion won or more.
Since 2010, five regional governments across Korea have hosted five international sporting events and recorded more than 1 trillion won in total losses.
Over the past five years, South Jeolla has hosted the annual Formula One Korean Grand Prix. The city government of Sangju, North Gyeongsang, also hosted the World University Equestrian Championship in 2010, while the Daegu Metropolitan Government in 2011 hosted the World Championships in Athletics, which was organized by the International Association of Athletics Federations.
And last year, Chungju in North Chungcheong hosted the World Rowing Championships, while Incheon Metropolitan Government hosted the Asian Indoor and Martial Arts Games.
All of the five sporting events failed to bring in revenue. The five governments spent about 1.2 trillion won to build relevant infrastructure and operate the events, while the earnings from ticket sales hovered at just about 203 billion won. In the end, the losses amounted to nearly 1 trillion won.
South Jeolla, in particular, took a hit after hosting the Formula One race for four consecutive years. Sluggish ticket sales for the event, which was held in Yeongnam, about 350 kilometers (217 miles) southwest of Seoul, resulted in losses amounting to about 676 billion won.
The provincial government invested approximately 493 billion won to build the track and spent tens of billions of won each year just to host the race. Infrastructure aside, the province spent about 300 billion won to operate the event for four years and only saw about 118 billion won in revenue.
Concerns have also grown around the 2018 Winter Olympics, to be hosted by Pyeongchang in Gangwon, which will cost the government a stunning 12.8 trillion won. Neither the city nor the central government has any concrete plans for Pyeongchang following the conclusion of the Games, raising fears that the city could fail to maintain industrial output.
But despite dismal results, yet more money from the state coffers is slated to be spent this year on hosting expensive events. The central government is set to spend 108 billion won for the 2014 Incheon Asian Games and nearly 82 billion won in subsidies for the 2015 Gwangju Summer Universiade.
Kim said that he expects the passage of the bill to greatly reduce the squandering of state funds.
BY KANG JIN-KYU [email@example.com]